Michelle Mone-linked company should pay back £121m for 'faulty PPE'
The Department of Health and Social Care is suing the firm for allegedly breaching a deal for the gowns.
A company linked to Tory peer Michelle Mone should pay back more than £121 million for breaching a Government contract for 25 million surgical gowns during the coronavirus pandemic, the High Court has heard.
The Department of Health and Social Care (DHSC) is suing PPE Medpro for allegedly breaching a deal for the gowns, with lawyers for the Government telling the court they were "faulty" because they were not sterile. The company, a consortium led by Baroness Mone's husband, businessman Doug Barrowman, was awarded Government contracts by the former Conservative administration to supply PPE during the pandemic, after she recommended it to ministers.
Both have denied wrongdoing. The Government is seeking to recover the costs of the contract, as well as the costs of transporting and storing the items, which amount to an additional £8,648,691.
PPE Medpro said it "categorically denies" breaching the contract, and its lawyers claimed the company has been "singled out for unfair treatment".
Opening the trial on Wednesday, Paul Stanley KC, for the DHSC, said: "This case is simply about whether 25 million surgical gowns provided by PPE Medpro were faulty. It is, in short, a technical case about detailed legal and industry standards that apply to sterile gowns."
Mr Stanley said in written submissions the "initial contact with Medpro came through Baroness Mone", with discussions about the contract then going through one of the company's directors, Anthony Page.
Baroness Mone remained "active throughout" the negotiations, Mr Stanley said, with the peer stating Mr Barrowman had "years of experience in manufacturing, procurement and management of supply chains". But he told the court Baroness Mone's communications were "not part of this case", which was "simply about compliance".
He said: "The department does not allege anything improper happened, and we are not concerned with any profits made by anybody."
In court documents from May this year, the DHSC said the gowns were delivered to the UK in 72 lots between August and October 2020, with £121,999,219.20 paid to PPE Medpro between July and August that year. The department rejected the gowns in December 2020 and told the company it would have to repay the money, but this has not happened and the gowns remain in storage, unable to be used.
In written submissions for trial, Mr Stanley said 99.9999% of the gowns should have been sterile under the terms of the contract, equating to one in a million being unusable. The DHSC claims the contract also specified PPE Medpro had to sterilise the gowns using a "validated process", attested by CE marking, which indicates a product has met certain medical standards.
He said "none of those things happened", with no validated sterilisation process being followed, and the gowns supplied with invalid CE marking.
He continued that 140 gowns were later tested for sterility, with 103 failing.
He said: "Whatever was done to sterilise the gowns had not achieved its purpose, because more than one in a million of them was contaminated when delivered. On that basis, DHSC was entitled to reject the gowns, or is entitled to damages, which amount to the full price and storage costs."
In his written submissions, Charles Samek KC, for PPE Medpro, said the "only plausible reason" for the gowns becoming contaminated was due to "the transport and storage conditions or events to which the gowns were subject", after they had been delivered to the DHSC.
He added the testing did not happen until several months after the gowns were rejected, and the samples selected were not "representative of the whole population", meaning "no proper conclusions may be drawn".
He said the DHSC's claim was "contrived and opportunistic" and PPE Medpro had been "made the 'fall guy' for a catalogue of failures and errors" by the department.
He said: "It has perhaps been singled out because of the high profiles of those said to be associated with PPE Medpro, and/or because it is perceived to be a supplier with financial resources behind it.
"In reality, an archetypal case of 'buyer's remorse', where DHSC simply seeks to get out of a bargain it wished it never entered into, left, as it is, with over £8 billion of purchased and unused PPE as a result of an untrammelled and uncontrolled buying spree with taxpayers' money."
He also said there was a "delicious irony" that Baroness Mone was mentioned in the DHSC's written submissions, when she had "zero relevance to the contractual issues in this case". Neither Baroness Mone nor Mr Barrowman is due to give evidence in the trial, and Baroness Mone did not attend the first day of the hearing on Wednesday.
A PPE Medpro spokesperson said the company "categorically denies breaching its obligations" and will "robustly defend" the claim. The trial before Mrs Justice Cockerill is due to last five weeks, with a judgment expected in writing at a later date.
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